There are no bonuses at Hypo Vorarlberg

The Swiss branch of Hypo Vorarlberg achieved a profit before taxes of 4.6 million francs in 2022. “After the record result of 2021, the second-best result of the bank,” says regional manager Walter Ernst. However, the profit only fell due to special effects. In purely operational terms, the profit is at the level of the previous year. This is how Hypo Vorarlberg grew in 2022. Loans to customers increased by 100 million francs, and customer funds under management by 30 million. The balance sheet total grew by almost 10 percent to 1.184 billion.

Wages capped politically

For Ernst, the success shows that the bank serves an important niche. Because the Swiss branch in St.Gallen is not the only foreign location of the Austrian parent bank: it is also active in Germany and Italy. A plus for his bank. “One in two of the Swiss population has a connection to other countries, be it a residence permit or a second passport,” says Walter Ernst. This applies even more to entrepreneurs: they often not only have family ties, but also business ties abroad. However, succession arrangements or inheritances across borders often harbor pitfalls due to the different legal situation.

To circumvent this, the bank often works with other Hypo branches or external partners abroad. That’s why Walter Ernst is happy that there are no bonuses at Hypo Vorarlberg. “When you tackle a case like this, you don’t know in advance who will benefit from it,” he says. Nevertheless, you have to find the best solution for the customer together. And that doesn’t work if those involved look at their own advantages. Not only does Hypo Vorarlberg have no bonuses, the salaries of the board members are also capped. The bank is owned by the Austrian state of Vorarlberg and a holding company consisting of Landesbank Baden Württemberg and Landeskreditbank Baden Württemberg. “So there are restrictions as with the bonuses,” says Ernst. Nevertheless, the bank always manages to find good employees for their positions

Few inflows from Credit Suisse

In order to be able to work even better as a cross-border corporate bank, the Swiss branch of Hypo Vorarlberg has now also reorganized its IT system at the beginning of the year. Since then, the business volume has continued to grow. Not at the expense of Credit Suisse, which was forced to merge with UBS. It has lost a massive number of customers and assets under management in recent months. “But we only notice that marginally,” says Ernst. But he’s not sad about it either. “We are aiming for consistent, solid growth, and there is always a counter-movement.” You saw that in the financial crisis, when UBS had to be rescued. “Many customers have migrated to other banks. But many have returned.”

Nevertheless, he is happy with the solution that the government, UBS, Finma and the National Bank have found for the reeling CS. “It was particularly important for the image of the Swiss financial center to ensure stability quickly.”